Nigeria oil revenue: Auditors uncover N168bn puzzle

An official of the American audit firm, Mr Chris Nurse was making the presentation during Wednesday’s Federal Executive Council (FEC) meeting when suddenly President Obasanjo halted him midway ordering the firm to fish out the discrepancy. The comprehensive audit of the oil and gas sector was prompted by the Extrative Industry Transparency Initiative (EITI). Explaining the discrepancy, Mr. Nurse said the amount could not be reconciled due to difference in the reports of oil companies and that of the Central Bank of Nigeria (CBN) which he said had kept bad records before now. His words: “The quality of the records in the early years was really not good”. However, efforts by the duo of Finance Minister, Dr Ngozi Okonjo-Iweala and her solid Minerals counterpart, Dr (Mrs) Oby Ezekwesili could not persuade Obasanjo to change his mind as the president insisted the audit firm must fish out the discrepancy. President Obasanjo said if the discrepancy in the amount was not resolved, Nigerians might be tempted to think the monies were stolen. “If you know the society which I have the fortune of leading, it is as good as somebody has gone away with US$1.264 billion and it cannot be anybody other than Obasanjo. This is the truth. We have had a case like this before”. Talking further on the discrepancies, Mrs Ezekwesili, stated that, “as a typical example, in 1999 CBN indicated in its report to have stated a receipt of US$70 million less than what the companies said that they paid. “But then, in 2000 CBN reported that it received US$90 million more than the companies said that they have paid. “So, you can see that clearly that there are issues of weak accounting records. That in itself is a challenge. It does not mean that money has been misappropriated but when you have this control measures, you curtail the opportunity for something to go wrong”. President Obasanjo, while speaking further on the US$250 million net difference, stated that “even that net difference, you should have gone into it and tell us why the net difference. “As far as I am concerned, is it something that has come from the oil companies that has not come or is it something that was missing in the Central Bank or what was it? Look, I know the society that I am dealing with. “Even if it will take you three months to come to this, let us have it in three months. All that the Nigerians will say or the Nigerian press is the US$1.264 billion gross difference”. For emphasis, he added that “I will not have it this way. That is the reason why there are accountants and auditors and they should give us what we want. I want you to come and tell me that this is the net difference and we are looking into it. “Why are we making a presentation when we are not ready? US$250 million is to me a very, very important and large amount of money. “So what you (auditors) now have to say to me or do for us, is where is this discrepancy. How did it occur? Can we reconcile? I am interested in that”. President Obasanjo also noted that “we deal with a very incredulous society and what you have said now, if you have said it in the final release I would be happy but when Nigerian people see that look, there is gross difference of US$1.264 billion and of course it did not say as you have said now that look there are records of what has been paid that did not appear and what has not been paid and appeared, the charges are that these would let out.” The Hart Group has however, stated that, “what we have got to at the moment is that the oil companies and the bank have agreed that this is the net difference. “What has not happened as far I know at least, is any further investigation on a bilateral basis by the bank and the companies and that is one of the recommendations that we think should happen before going forward”. ‘ Daily Champion.